Class sizes increasing

Question

So a lot of people have probably heard that HBS added another section (90 people) this year. Stanford is also planning to add 15-20 people to their class this year. I guess some other schools are debating doing this since each person means 50k a year and with tightening budgets that money will come in handy.

This was a big plus for applicants this year and will be so until they reduce class sizes, since it obviously makes it easier to get in when there are more seats. The only problem is this means more competition for jobs at those schools, especially if companies dont change their recruiting at the school to reflect the size difference.

billyjeans · Answer

This is great news indeed, not just for H/S, but other school applicants as well.

riverripper · Answer

definitely has a trickle down effect. More people going to them definitely means that people who might not have made it in to top 5 schools now will. However, it might also negatively affect things at those schools like course bidding (more people bidding will make great courses more expensive) and maybe recruiting.

Paradosso · Answer

I tend to see more of this trickling down effects than upside for perspective applicants (that could very well be because I have admits).

The point river outlined rings true: if you increase class size because money is tight you are having

(1) more people to fight for

(2) fewer (for the very reason that money is tight, and not only for business schools) jobs, all of this under

(3) your brand, which is also suffering from a decreasing average quality of students, due not to the increase per se (since more and more people get a top education each year), but from the fact that if you are pumping up the volume for money, you tend to want to admit people who pay 50k/yr cash (i.e.: no proportional increase in fellowships/grants, possibly a shift in admission criteria towards kids coming from well-off families, etc.).

Would you like to have +10% of admission into a place where landing your dream job will be +20% difficult?

Icarus · Answer

Hi,
Riverripper can you kindly quote your source ? I had heard that they might accept some additional students (15-20) but I have not seen anything to indicate that HBS is adding a whole new section (90 Students)?

Thanks in advance,

I`

atlmba2009 · Answer

I could be wrong, but I don't believe that the additional $50k is what drives schools to increase class sizes. After all, tuition at most schools doesn't even come close to covering all of the costs. The rest is covered by donations, investments, and public funds. If a top b-school that has a $300-$400 million endowment lets in an additional 20 students, even at full tuition, that adds up to only an additional $1 million in revenue. The schools have to increase their own costs to accommodate those students in the form of additional faculty, larger facilities, etc. Also, I am sure the schools are aware of the possible drop in prestige related to higher acceptance % and lower % of grads with jobs, and the long-term ramifications associated with that, so they aren't going to suddenly expand the class by 20%.

Over the years, schools hire more professors, build larger facilities, and expand. I think that is reflective of a larger, more qualified applicant pool, not necessarily a need for a quick infusion of funds. More job opportunities are created as the economy expands as well, so in the short term a school's reputation might be damaged, but in the long term, that seems to wash away.

Over the years, schools hire more professors, build larger facilities, and expand. I think that is reflective of a larger, more qualified applicant pool, not necessarily a need for a quick infusion of funds. More job opportunities are created as the economy expands as well, so in the short term a school's reputation might be damaged, but in the long term, that seems to wash away.

Pathfinder · Answer

Some guy on BW forums claims he is connected to Wharton's adcom. He told something about 50 people class increase overthere also. Of course, it's just a BW forums, should be taken with a grain of salt, but... We can see there are rummors all over top schools.

snipertrader · Answer

I visited wharton yday...and asked the question on size increase. I was told, yes we are going to increase the size for the FT mba, however the size is still not known.

highhopes · Answer

It sounds like some schools will have increases for this year because they over-admitted not knowing how this year would turn out. Obviously an entire section is something different.

foodstamp · Answer

Where did you get those numbers from RR?

riverripper · Answer

HBS's dean came out and has said they are adding a section and our Dean told us that Stanford's dean told them during their last meeting they were planning on adding students this year.

As for the costs...each student you add isn't going to mean the same cost increase. Think of it as marginal cost. If you can add 20 people without increasing the number of professors, career services, administration, or expanding a building to fit them then those people aren't going to cost you that huge number. So if they say each student costs 75k and you have 1000, students that 75 million is not going to go up. So if your students pay 50k each and you add 50 people, you just added 2.5 million and your costs probably aren't going to rise 75k for each since you have huge fixed costs for the buildings, support staff, utility bills, and all that. So as long as your dont increase your costs by 2.5m or more then you are better off financially.

I highly doubt these schools will be adding much in the way of staff to do it. Our dean flat out said some schools were doing it specifically to help with finances at this point. A million may sound like a drop in the bucket but still that is covers a lot of expenses at a time when your income from endowment is actually negative.

atlmba2009 · Answer

The costs are fixed, but most schools build larger facilities and hire new professors in advance of increasing class size. So yes, there is definite overhead to a point, but it is probably appropriate to figure in past spending into the cost of accommodating new students. Adding 20 new students one year isn't going to greatly affect average class size or require more professors, but consistently adding new students definitely will.

riverripper · Answer

Stanford already is planning a new facility but it wont be ready for a bit so maybe they are working on slowly increasing in size. HBS and Wharton definitely aren't going to be building new facilities anytime soon. Adding 10% to a class like these schools are doing probably wont be a huge issue unless a school already is pretty tight to capacity. I dont think these inceases are going to be a continuous thing and some schools might shrink class size again if applications decrease. Its easy to add quality students when applications are up in the ranges they are now but if they decrease 40% to where they were several years ago then they may want to shrink down again.

msday · Answer

I thought the increase in HBS class size was closer to 30 than 90, but I haven't heard anything from this front in a while, so I may be mistaken.

bsd_lover · Answer

LBS has increased it class size this year, from 320 to about 375. This was a pre-planned increase, nothing to do with increasing applications (they wanted one more cohort/stream).

riverripper · Answer

I heard it was a whole section, and I believe that is 90 people right? Maybe my intel is off. Still 90 people would be huge at any other school but thats like adding 20 to stanford when you look at the overall size of the student body.

milias · Answer

So does anyone know for sure yet if the increase is going to 30, 50, or 90 people? Kinda important for those of us who are planning to apply.

Jerz · Answer

It really won't be that much different from an applicant standpoint. Your approach to how you position yourself in your application shouldn't depend on whether HBS's class size is 900, 930 or 990.

milias · Answer

As far as the application is concerned, I agree with you that class size shouldn't matter; however, as far as me as an applicant is concerned, of course it matters, because it's important to know where I stand.

Jerz · Answer

With the size of the applicant pools to these schools, you shouldn't expect to see a noticeable change in acceptance rates as a result of class size increases. Even if HBS adds an entire section, acceptance rates would move from 10% to 11% (assuming that the number of applications doesn't change much). So you still stand as one applicant out of many in an ultra-competitive applicant pool. The best thing to do is focus on putting together the best application you can. Out of the roughly 9000 applications HBS receives each year, the odds of you being one of the 30-90 who may be impacted by a change in class size are pretty slim.

Class sizes increasing

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